Vayable helps tourists get off the beaten path. Can this San Francisco start-up find its way beyond seed funding?
Far From the Madding Crowd Vayable's co-founders, Shelly Roche (left) and Jamie Wong, want to take tourists where guide books don't, like the old Sutro Baths here in San Francisco.
The Pitch: "Vayable makes it easy to find unique things to do when you're traveling. Instead of riding a double-decker bus around New York City, for instance, why not go on a street-art tour led by a graffiti artist? Our platform lets travelers shop for activities directly from local experts. It also empowers guides by giving them the infrastructure to create their own businesses. Activities and tours are a $27 billion industry, and they represent the fastest-growing segment of the leisure-travel market. We're raising money to expand our presence in key cities, validate our marketing strategy, and reach a profitable model that we can scale."
Co-founders: Shelly Roche and Jamie Wong
Location: San Francisco
Launched: April 2011
2011 projected revenue: $20,000
2012 projected revenue: $1.5 million
Registered users: 2,600
Top destinations: San Francisco, New York City, Los Angeles, Paris, Berlin, and London
Fee from sellers: 15 percent of the cost of each tour
Fee from buyers: Three percent of the cost of each tour
Previous funding: Preseed funding from the VC fund 500 Startupsand undisclosed amounts fromangel investors
Funding sought: $500,000
The Investors Weigh In
Find More Guides There has been a lot of peer-to-peer commerce in different categories, such as Airbnb in lodging. So, conceptually, I see the merit in Vayable's concept. But buyers won't come if there aren't enough sellers offering interesting tours. I would want to see how the founders approach reaching a critical mass. That might mean having a concentration of users in a particular region, or in a specific category, like culinary tours. For most companies of this nature, it's often best to raise a small amount of capital early on, so I think $500,000 is on target.
Lee Hower Partner | NextView Ventures Boston
Quality Control Is Key I love Vayable's pitch; it's probably something I would use. I wonder, though, what margins the founders will be able to get, given the effort it takes to attract tour providers and ensure quality. With such a broad base of providers, Roche and Wong have to be aware of how to minimize risks. What if the graffiti artist has a scheduling conflict and sends someone else to give the tour? This round of financing should allow the founders to fine-tune their business model, so they can be absolutely sure of their metrics in the next round.
Cindy Padnos Founding Managing Director | Illuminate Ventures Oakland, California
Expand the Market I'm not sure if Vayable can grow large enough to be attractive to a venture firm, although it might be attractive to a seed investor. My guess is that the market Vayable addresses is quite small. The majority of tourists in San Francisco want to go to the Golden Gate Bridge or Fisherman's Wharf. But there is opportunity to expand the market. Because its tour guides have local expertise, Vayable might find ways to attract people who normally wouldn't book a tour, such as residents looking to discover new aspects of their own city.